Energy Fuels Closes Upsized $700M Convertible Notes Offering to Accelerate Rare Earth & Uranium Growth

• Energy Fuels successfully closed an upsized offering of $700 million in convertible senior notes due 2031, including the full exercise of a $100 million overallotment option by initial purchasers.
• The convertible notes carry an attractive 0.75% annual interest rate and a conversion price of $20.34 per share, representing a 32.5% premium to the September 30, 2025 closing price.
• The company purchased $53.55 million in capped call options that effectively increase the conversion price to $30.70 per share, protecting against dilution until the share price doubles from the reference price.
• Proceeds from the offering will strengthen the balance sheet and accelerate rare earth initiatives, including expansion at the White Mesa Mill and the Donald Project in Australia.
• The upsizing of the offering by $67.5 million beyond the initial size reflects strong investor confidence in both the company's rare earth strategy and its position as a leading low-cost uranium producer in the United States.

Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR), a leading U.S.-based uranium mining company and emerging rare earth producer, has completed a significant capital raise that positions the company to accelerate its strategic initiatives across both business segments. The Denver-based company operates the White Mesa Mill in Utah, the only conventional uranium mill in the United States, and is advancing rare earth element production capabilities while maintaining its position in domestic uranium production. On October 3, 2025, Energy Fuels announced the successful closing of a $700 million convertible senior notes offering, representing one of the company's largest financing transactions and providing substantial capital to fund growth initiatives in the critical minerals sector. For investors evaluating Energy Fuels, this transaction demonstrates both market confidence in the company's strategy and management's ability to access capital markets on favorable terms during a period of heightened interest in domestic energy security and critical mineral supply chains.

Offering Structure & Terms

The offering consisted of 0.75% Convertible Senior Notes due 2031, with an aggregate principal amount of $700 million. The transaction included the full exercise of the initial purchasers' option to acquire an additional $100 million of notes beyond the originally planned amount. Goldman Sachs & Co. LLC served as sole book-running manager, while Cantor acted as lead manager and capped call coordinator, Morgan Stanley as lead manager, and BMO Capital Markets and Canaccord Genuity as co-managers.

The notes carry a cash interest coupon of 0.75% per annum, with semi-annual payments in arrears scheduled for May 1 and November 1 each year, commencing May 1, 2026. The conversion price was set at approximately $20.34 per common share, representing a premium of approximately 32.5% to the last reported sale price on the NYSE American on September 30, 2025. The notes are scheduled to mature on November 1, 2031, unless earlier converted, redeemed, or repurchased.

Energy Fuels retains flexibility in how conversions are settled, with the ability to use common shares, cash, or a combination of both at the company's election. Additionally, the company maintains the right to redeem the notes under certain circumstances and will be required to offer repurchase upon the occurrence of specific triggering events, subject to the terms outlined in the indenture governing the notes.

Dilution Protection Through Capped Call Transactions

A notable feature of the financing structure involves Energy Fuels' purchase of capped call options for approximately $53.55 million. These derivative instruments effectively increase the conversion price of the notes to $30.70 per share, representing a 100% premium over the last reported sale price on September 30, 2025. The capped call structure provides meaningful protection against equity dilution for existing shareholders.

Under this arrangement, if the notes convert at maturity, the capped calls will offset potential dilution until the share price reaches the cap price of $30.70. This mechanism allows Energy Fuels to benefit from a low-cost financing structure while limiting the dilutive impact on shareholders unless the stock price approximately doubles from the reference price of $15.35 per share. The conversion price remains subject to customary anti-dilution adjustments as specified in the note terms.

Management Commentary on Strategic Rationale

Energy Fuels' CEO Mark Chalmers emphasized the favorable timing and terms of the transaction.

CEO Mark Chalmers stated:

"We are pleased to announce the completion of a significant financing milestone, as we capitalized on the robust market environment. We believe the convertible notes, with an attractive annual coupon of 0.75%, compare favorably to traditional debt financing. In addition, we purchased capped call options, which offset dilution for conversions at maturity until our share price has potentially doubled from the reference price of $15.35 per share."

The CEO highlighted how the capital raise positions the company for accelerated growth across its key business initiatives. "This strategic capital raise strengthens our balance sheet and enhances our ability to accelerate our rare earth initiatives, including the expansion at our White Mesa Mill and Donald Project in Australia," Chalmers noted.

Market Reception & Upsizing

The initial offering size was increased by $67.5 million beyond what was originally planned, reflecting strong demand from institutional investors. This upsizing, combined with the full exercise of the overallotment option, demonstrates significant market interest in Energy Fuels' growth story across both its uranium and rare earth business segments.

Chalmers attributed the positive market reception to investor confidence in multiple aspects of the company's business model. "We are pleased to announce the closing of this offering, reflecting strong investor sentiment not only regarding our rare earth initiatives, but also our low-cost, US-leading uranium production, that enabled an additional $67.5 million upsizing. We believe this outcome represents a clear vote of confidence in our team and strategy," Chalmers commented.

The successful upsizing suggests that institutional investors view Energy Fuels as well-positioned to capitalize on growing demand for both uranium and rare earth elements, particularly as governments and industries focus on supply chain security for critical minerals.

Use of Proceeds & Strategic Priorities

While the press release does not specify exact allocations, management indicated that proceeds will be directed toward strengthening the balance sheet and accelerating rare earth initiatives. The White Mesa Mill expansion represents a central component of the company's rare earth strategy, as the facility is being developed to process rare earth-bearing monazite sand and produce separated rare earth oxides.

The Donald Project in Australia represents another key growth initiative that will benefit from the capital raise. This rare earth project is expected to contribute to Energy Fuels' diversified approach to critical mineral production, complementing the company's existing uranium operations and rare earth processing capabilities in the United States.

The transaction provides Energy Fuels with financial flexibility to advance these capital-intensive projects while maintaining its existing uranium production operations. The relatively low interest rate of 0.75% allows the company to access substantial capital while minimizing the ongoing cash interest burden, preserving funds for operational and capital expenditures.

Uranium Market Position

Energy Fuels maintains a leadership position in domestic uranium production, operating the White Mesa Mill as the only conventional uranium mill currently operating in the United States. This strategic asset provides the company with significant optionality in a uranium market characterized by growing demand from nuclear power generation and concerns about supply chain security.

The company's low-cost uranium production capabilities were specifically cited by management as a factor contributing to investor interest in the convertible notes offering. As nuclear energy gains acceptance as a clean baseload power source and governments prioritize domestic uranium supply, Energy Fuels' existing production infrastructure and project pipeline position it to benefit from favorable market dynamics.

The successful capital raise provides resources to maintain and potentially expand uranium production capabilities alongside the company's rare earth initiatives, supporting a diversified critical minerals strategy.

Rare Earth Elements Strategy

The rare earth elements sector represents a significant growth opportunity for Energy Fuels, as global supply chains for these critical materials remain concentrated in China. Rare earth elements are essential inputs for numerous high-technology applications, including electric vehicle motors, wind turbines, defense systems, and consumer electronics.

Energy Fuels' approach involves processing monazite sand at the White Mesa Mill to produce mixed rare earth carbonate, followed by separation into individual rare earth oxides. The company aims to establish a vertically integrated rare earth supply chain based in the United States, addressing both commercial demand and government priorities for domestic critical mineral production.

The $700 million capital raise provides substantial resources to advance the White Mesa Mill expansion and develop the separation capabilities necessary to produce the specific rare earth products demanded by end users. The Donald Project in Australia adds geographic diversification to the rare earth strategy while providing access to additional feedstock sources.

Financial Structure Considerations

From a capital structure perspective, the convertible notes offering provides Energy Fuels with several advantages compared to alternative financing approaches. The 0.75% coupon represents a relatively low cost of capital, particularly when compared to traditional senior debt that would likely carry higher interest rates and more restrictive covenants.

The conversion feature allows investors to participate in potential equity upside while providing Energy Fuels with the option to settle conversions in cash, common shares, or a combination thereof. This flexibility may prove valuable depending on the company's financial position and stock price at the time of conversion.

The six-year maturity extending to November 2031 provides a long runway before principal repayment becomes due, allowing Energy Fuels to focus on executing its growth strategy without near-term refinancing concerns. The capped call structure, while requiring an upfront expenditure of $53.55 million, provides meaningful protection against dilution and demonstrates management's confidence in the company's long-term value creation potential.

Market Context & Industry Dynamics

The successful completion of the offering occurs within a broader market context of increasing attention to critical minerals supply chains and energy security. Governments in the United States and allied nations have identified uranium and rare earth elements as strategic priorities, implementing policies and programs to encourage domestic production and reduce dependence on foreign sources.

For uranium, growing recognition of nuclear energy's role in decarbonization efforts has improved the outlook for demand growth. Multiple countries are extending the operating lives of existing reactors, restarting previously shuttered facilities, and planning new nuclear power plant construction. These trends support a constructive view of long-term uranium demand.

In rare earth elements, concerns about supply chain concentration and geopolitical considerations have driven initiatives to develop non-Chinese sources of production. Energy Fuels' position as an emerging U.S.-based rare earth producer aligns with these policy priorities and may create opportunities for government support or off-take agreements.

For Investors

The successful closing of Energy Fuels' $700 million convertible senior notes offering represents a significant milestone that strengthens the company's financial position and provides capital to advance key growth initiatives. The favorable terms achieved, including a 0.75% interest rate and the ability to upsize the offering by $67.5 million, demonstrate strong institutional investor interest in the company's diversified critical minerals strategy spanning both uranium and rare earth elements.

For investors evaluating COMPANY, several factors merit consideration. The transaction provides substantial capital to accelerate rare earth expansion at the White Mesa Mill and advance the Donald Project in Australia while supporting the company's position as a leading U.S. uranium producer. The capped call structure offers meaningful dilution protection, with the effective conversion price set at a 100% premium to the reference share price. The company operates in sectors characterized by favorable long-term fundamentals, including growing uranium demand from nuclear power generation and government initiatives to develop domestic rare earth supply chains. The relatively low interest burden of the convertible notes preserves cash flow for operational needs and capital investment, while the 2031 maturity provides a long-term capital structure. However, investors should conduct thorough due diligence on execution risks associated with the company's growth initiatives, uranium and rare earth market dynamics, and the potential for dilution if the share price appreciates significantly above the conversion price. The successful capital raise positions Energy Fuels to pursue its strategic objectives from a strengthened financial foundation, though ultimate value creation will depend on effective execution of its uranium and rare earth business plans.